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Morgan Stanley analyst Stephen Calder Byrd cut his rating on the hydrogen fuel-cell technology company to Hold from Buy.
Morgan Stanley analyst Stephen Calder Byrd cut his rating on the hydrogen fuel-cell technology company to Hold from Buy.
(Bloomberg) -- Welcome to Thursday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:U.S. consumer prices climbed in April by the most since 2009, intensifying the already-heated debate about how long inflationary pressures will last. Rates traders responded by boosting bets that the Fed may be forced to hike interest rates next yearChina’s economic activity rotated to consumption from production over a string of holidays in early May, writes Chang ShuCanadians are so alarmed by the red-hot housing market that many say they’d like to see the central bank raise interest ratesTesla CEO Elon Musk said his firm is suspending purchases with Bitcoin, triggering a slide in the value of the digital currencyThe reopening of the U.S. economy is throwing forecasters for a loopThe U.S. budget deficit approached $2 trillion with five months left in the fiscal year, amid another wave of pandemic-relief paymentsThe PBOC has been tapping on the liquidity brakes, with credit data suggesting its tapering is working; however, the latest abrupt pullback leads David Qu to think it will slow withdrawal of liquidityThe EU’s framework for controlling debt must be changed to help overcome Covid’s economic damage, Italy’s Mario Draghi saidGlobal remittances showed surprising strength in 2020 as heavy government stimulus spending put cash in immigrants’ pockets The Bank of England is pushing for a shakeup of the $6.9 trillion money market fund industryIndia’s Covid catastrophe shows the danger of complacencyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Wall Street's main indexes were set to open higher on Thursday, with the tech-heavy Nasdaq rebounding, after data showed fewer Americans filed for weekly jobless claims, while investors shrugged off a surge in producer prices. The Labor Department's data showed U.S. producer prices rose 0.6% last month, higher than expected, after a gain of 1% in March.
(Bloomberg) -- The Bank of Canada is closely monitoring recent gains in the nation’s currency, to ensure the appreciation doesn’t create headwinds for the nation’s economic outlook, according to the central bank’s head.At a press conference Thursday, Governor Tiff Macklem said the recent appreciation reflects in part higher commodity prices, which are good for the nation’s economy. Still, a continuation of the gains could begin to pose a risk to the central bank’s most recent forecasts released last month, which assumed an exchange rate of $0.8 per Canadian dollar.The Canadian dollar is up 4.9% so far this year, the best performing major currency. It weakened after Macklem’s comments, falling to C$1.2179 per U.S. dollar, or $0.8211 per Canadian dollar at 1:12 p.m. in Toronto trading.“If it moves a lot further that could have a material impact on our outlook and it’s something we’d have to take into account in our setting of monetary policy,” Macklem said Wednesday. “If the dollar were to continue to move -- particularly if its not reflecting good developments for Canada -- that could become more of a headwind on our export projection.”The Canadian dollar has been tracking resource prices higher this year. The Bank of Canada commodity price index -- a gauge that tracks movements of commodities produced in the country -- has hit the highest since 2014 after gaining 30% so far this year. Excluding energy, the index is at an all-time high.But the currency also appears to have gotten a lift from Macklem’s messaging, after the Bank of Canada last month accelerated the timetable for a possible interest-rate increase and pared back its bond purchases.“Macklem only said that if the currency were to appreciate absent fundamental reasons, then they’d be more concerned about competitiveness implications but that so far that’s not the case,” Derek Holt, an economist at Bank of Nova Scotia, said by email.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
U.S. jobless claims data for April will inform the markets of the strength of the employment recovery as the stock sell-off continues. Disney’s outlook is in focus, while Elon Musk dumps bitcoin as a payment method for Tesla (NASDAQ:TSLA) cars. The conflict in Gaza escalates, while Colonial Pipeline slowly restarts its key pipeline.
Huawei Chief Financial Officer Meng Wanzhou and her legal team are set to return to court for three more weeks of extradition hearings starting Aug. 3, following a fourth attempt by Meng’s lawyers to introduce new evidence, a Canadian court heard on Wednesday. Meng, 49, was arrested at Vancouver International Airport on a U.S. warrant for bank fraud in December 2018. Meng maintains she is innocent of the charges and has been fighting her extradition while living under house arrest in Vancouver.
(Bloomberg) -- Bird Rides Inc. will go public by merging with a blank-check company, securing a new source of capital after venture capitalists largely lost interest in money-losing scooter rental startups.A special purpose acquisition company called Switchback II Corp. will take Bird public and provide as much as $428 million in funding to the business. The deal has an enterprise value of about $2.3 billion, the companies said in a statement Wednesday.The transaction includes private funding from Fidelity Investments, which had previously backed Bird, as well as a credit facility from other firms.A former Uber Technologies Inc. executive, Travis VanderZanden, founded Bird in 2017. It dropped electric scooters onto the sidewalks of major cities and let customers remotely unlock and rent them using an app. The model was widely copied, including by Uber, and turned Bird into one of the fastest startups to reach a $1 billion valuation.It took only a few years for the scooter fad to fade. Bird and its closest competitor, Lime, cut staff and dialed back operations. Uber also retreated. The coronavirus pandemic dealt a further blow when people curbed travel and fled the city centers that scooter companies occupy.SPACs provide a path to fundraising and the public markets seen as more friendly to cash-burning companies. Last year was by far the biggest for such deals, which have slowed in 2021. Bloomberg first reported in November that Bird was in early-stage talks to merge with a SPAC.Switchback II listed in January and at first indicated it would seek to combine with an energy company. In a statement, Bird highlighted its green-energy bonafides and said it would introduce additional vehicle options, such as bikes, in a bid to reduce use of gas cars.“We plan to scale our platform to provide our low carbon transportation services to more people in more cities around the world,” said Jasmine Wallsmith, a spokeswoman for Bird.The backing from Fidelity represents an apparent reversal for the investment firm. In December, Business Insider reported that Fidelity was looking to unload some Bird shares at a loss.(Updates with comment from Bird in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A U.S. judge on Thursday dismissed antitrust claims against Alphabet Inc's Google brought by a group of advertisers, but offered them a chance to try again after addressing what she called "serious concerns." The ruling by District Judge Beth Labson Freeman in San Jose, California, marks one of the first major decisions in a spate of antitrust cases filed against Google over the last two years by users and rivals as well as the U.S. Department of Justice and state attorneys general. Labson Freeman said plaintiffs, including Hanson Law Firm and Prana Pets, that alleged Google abuses its dominance in digital advertising need to clarify which market they think it monopolizes.
(Bloomberg) -- Christopher Waller on Thursday became the latest Federal Reserve governor to try and dampen expectations for central bank action to curb rising prices that he sees as “temporary.”Waller, the third governor to speak this week, said that while inflation above the Fed’s 2% goal may last through 2022, it’s unlikely to be sustained. The comments echo those by Lael Brainard on Tuesday and Vice Chair Richard Clarida on Wednesday as Americans vex over rising prices. Several regional Fed presidents have delivered a similar message, including Richmond’s Thomas Barkin earlier on Thursday.“Despite the unexpectedly high CPI inflation report yesterday, the factors putting upward pressure on inflation are temporary, and an accommodative monetary policy continues to have an important role to play in supporting the recovery,” Waller told a virtual event hosted by the Global Interdependence Center. “We will not overreact to temporary overshoots of inflation.”Fed officials want to drive home the message that inflation spikes are transitory to counter criticism their ultra-easy monetary policy is making matters worse, as concern mounts on both Wall Street and Main Street. A report Wednesday showed consumer prices rose in April by the most since 2009. Prices paid to U.S. producers also increased by more than forecast last month.Officials will need to see several more months of economic data -- including the May and June labor-market figures -- before being able to fully judge the strength of the recovery, Waller said. That suggests it would be premature to discuss scaling back the Fed’s massive bond-purchase program at its June 15-16 meeting, in his view. The June employment report is released July 2.“The May and June jobs report may reveal that April was an outlier, but we need to see that first before we start thinking about adjusting our policy stance,” Waller said, referring to the weaker-than-expected employment data last month.Waller listed six things contributing to higher inflation readings: Base effects, or the comparison of prices this year to last year’s pandemic-depressed readings, higher energy costs, fiscal stimulus, spending of accumulated savings, supply bottlenecks and increased demand for workers, which is driving up wages.These will pressure price growth to rise above the Fed’s 2% goal this year and next year, Waller said, but inflation will return to target after that. He said inflation could reach 2.25% to 2.5% in 2021 and 2022, though sustained monthly surges to 4% would be a concern.The median Fed forecast calls for prices to rise to 2.4% this year as the economy reopens and pandemic concerns recede amid widening vaccine distribution. Policy makers see inflation falling back to their 2% goal next year.The Fed is backing its forecast to justify ultra-easy monetary policy that projects interest rates near zero through 2023, plus a vow to maintain asset purchases at $120 billion a month until it sees “substantial further progress” on employment and inflation.Taper TalkBut price increases have some investors betting that the Fed will need to scale back its bond buying sooner rather than later. Chair Jerome Powell and his colleagues have said it’s too early to start talking about tapering.St. Louis Fed chief James Bullard, speaking separately on Thursday, said “it’s too early to talk about taper because the pandemic is still going on.”Fed communication over asset purchases is risky. Former New York Fed chief William Dudley, recalling the taper tantrum of 2013 when financial markets were roiled by unexpected news the central bank was thinking of scaling back bond purchases, warned that it risks a re-run.“Sometime, probably later this year, the Fed is going to have to start to hint that we’re now moving away from maximum monetary policy stimulus. It’ll be very interesting to see how financial markets react,” he told the Council on Foreign Relations Thursday. “If that reaction is severe enough, that could actually affect the trajectory of monetary policy.” Dudley is a Bloomberg Opinion columnist.The economy has shown signs of a strengthening recovery in recent months, but some data have disappointed. Employers added 266,000 jobs in April, far short of the nearly 1 million increase expected by economists, data on Friday showed. Fed officials have said they are looking for multiple months of strong data when evaluating the trajectory of the recovery.‘Outcome Based’“We have said our policy actions are outcome-based, which means we need to see more data confirming the economy has made substantial further progress before we adjust our policy stance, because sometimes the data does not conform to expectations, as we saw last Friday,” Waller said.Waller said that several measures of employment are still depressed, namely the unemployment rates for Black and Hispanic workers, and the percentage of the population that is employed. But other indicators are back to normal: Job openings and the quits rate.“The economy is ripping, it is going gangbusters,” Waller said. “But we need to remember that it is coming out of a deep hole, and we are just getting back to where we were pre-pandemic.”(Updates with Bullard in seventh paragraph from bottom.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Technology stocks helped Wall Street's main indexes rebound on Thursday after three sessions of declines, as data showing fewer Americans filed for weekly jobless claims bolstered confidence in a U.S. economic recovery. The data comes on the heels of stronger-than-expected consumer prices data, a surge in commodity prices and signs of a labor shortage this week, stoking inflation concerns that could force the U.S. Federal Reserve to raise interest rates sooner than expected. Losses in the past three days had pulled the S&P 500 4% off its record closing high on Friday, while the tech-heavy Nasdaq was about 8% below its April 29 all-time high.
(Bloomberg) -- Asian stocks slumped Thursday, with the regional benchmark entering a technical correction, as mounting worries over inflation and a resurgence in Covid-19 cases soured investor sentiment.The MSCI Asia Pacific Index slumped 1.8%, taking its loss from a Feb. 17 peak to more than 10% and wiping out its gain for the year. Asian equities tracked losses in American shares after data on Wednesday showed U.S. consumer prices climbed in April by the most since 2009.“We need to kind of price in a more normal interest-rate environment, more normal inflation environment,” said Ken Peng, head of Asia investment strategy at Citigroup Inc.’s private-banking arm. “The shake up could last a while longer. But I’m still not too worried because growth will come back to be the most important element once interest rates normalize.”The selloff in Asia is part of this week’s rout in global equities as an explosive rally in commodity prices threatens to push up inflation. The region is also battling a fresh surge in coronavirus infections in several countries including India, Japan and parts of Southeast Asia, with slow vaccine rollouts and delays in reopening borders compounding concerns for equity investors.Tech stocks, which have been at the forefront of the recent slump, were the biggest drag on the Asian gauge Thursday. While the sector globally is having to contend with higher U.S. bond yields and stretched valuations, sentiment in Asia has also been hurt by regulatory tightening in China.Global LaggardSeasonality also seems to be playing a role. May has historically been the worst month for the MSCI Asia Pacific Index, with the benchmark averaging a 2% decline over the past 10 years, according to data compiled by Bloomberg. It is already down 4.1% so far this month.As a result, regional stocks are sharply underperforming their peers in the U.S. and Europe in 2021 after leading global equity gains last year. While the Asian benchmark is now down 1% year-to-date, the S&P 500 Index and the Stoxx 600 Index are both up more than 9%.“I suppose there’s the worry now we’ve hit something of a short-term peak for equity valuations in Asia,” said Kyle Rodda, an analyst at IG Markets Ltd. in Melbourne.There are a few headwinds sapping the appeal for Asian equities, he said. “Fed tightening is obviously a pressing concern right now -- being, technically speaking, quite EM sensitive, tighter financial conditions globally are a worry. Also, there’s the creeping concern that China’s economy is plateauing, meaning growth in the region is practically discounted.”Chinese shares snapped a two-day winning run on Thursday while stocks in Japan declined for a third day. Markets in Singapore, India, Indonesia, Malaysia and the Philippines were shut for a holiday.In Taiwan, the benchmark stock index extended losses after slumping the most since March last year on Wednesday partly due to concern over tightening of virus-linked restrictions.READ: Taiwan’s Stock Crash Deepens as Traders Unwind Leveraged BetsRecent fund flows suggest interest from global investors in Asian stocks is also lagging that in other regions. Since the beginning of the second quarter, more than $36 billion has flowed into North American and European equity funds compared with just $2 billion into Asian ones, according to a May 7 report from EPFR.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Credit card balances are extremely low, even as spending ticks up as the economy reopens. Everyone from the banks to the Fed has the same question about what it means.
All three major U.S. stock indexes notched solid gains, with the S&P 500 enjoying its biggest percentage gain in over a month. Recent economic data has prompted inflation fears as scarcity of both materials and workers threatens to send prices surging in the face of a demand boom. "If this is a footrace, supply chains are still tying their shoes," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
(Bloomberg) -- Mexico, Chile and Peru are all expected to hold their key interest rates near or at all-time lows in a bid to support their economies even as inflation spikes and political instability grows in Latin America.Every economist polled by Bloomberg expects central banks from those three countries to hold rates in separate decisions on Thursday -- a stark contrast with Brazil, where policy makers have already delivered two hikes of 75-basis points since March and promised a third one of the same size for June.“Most central banks across the region might remain cautiously on hold, on a rather neutral mode waiting to see more developments on inflation, the recovery and the evolution of local political developments,” said Marco Oviedo, chief Latin America economist at Barclays Plc.Any desire to cut will likely be tempered by above-target inflation in Mexico, and concerns over market stability ahead of elections in Peru.Mexico’s Resilient InflationCurrent rate: 4%Time of decision: 2 p.m. ETThe door for additional rate cuts remains closed in Mexico as rising fuel and food costs catapulted annual inflation to 6.1% in April, more than double the 3% target.Deputy Governor Gerardo Esquivel said last month he expects the price spike to be temporary, since prices are being compared against a deep slump this time last year, with inflation falling within the bank’s range in July. But many economists are less optimistic, starting to anticipate a rate hike in late 2021 or early 2022.High prices will continue “due to real inflationary pressures caused by the economic reopening in the Mexican services sector and the global increase in commoditiy prices,” said Gabriela Siller, director of economic analysis at Grupo Financiero BASE.What Bloomberg Economics Says“Mexico’s central bank is likely to hold the key interest rate at 4% on Thursday. Policy makers may sound a more cautious tone than in the last gathering due to high and resilient inflation through April. Some may keep the door open for additional accommodation, depending on new information.”-- Felipe Hernandez, Latin America economistClick here for the full report.Chile’s Low Rate PledgeCurrent rate: 0.5%Time of decision: 6 p.m. ETChile is forecast to hold its benchmark interest rate at a record-low, as the central bank says inflation will accelerate above target in coming months before returning to the 3% annual goal by December.Board members have also signaled borrowing costs will remain steady at least through year’s end. Any changes to that language may signal rates will move higher sooner rather than later. Indeed, consumer prices rose more than expected in April to 3.3% from the year prior, prompting analysts at Banchile Inversiones and Oxford Economics to raise their 2021 inflation forecasts.Read more: Latin American Central Bankers Stung by Food Inflation JumpIn a meeting with President Sebastian Pinera last week, board members reaffirmed the need for expansive public policies to drive a recovery that remains uneven. The government is unwinding virus quarantines which subjected 90% of the population to strict limits on commerce and movement. Policy makers are also on hold as Chile enters a period of political uncertainty, with the election of an assembly to rewrite the constitution on May 15-16 and a presidential election in November.Peru’s ElectionCurrent rate: 0.25%Time of decision: 7 p.m. ETPeru is forecast to hold borrowing costs at a record low for the 13th month in a row, fulfilling its pledge to keep supporting a pandemic-ravaged economy.Increasing political uncertainty and growing market volatility ahead of next month’s presidential runoff are likely to contribute to the bank’s decision to stay on hold for now.Peruvian bonds and currency crashed last month when Pedro Castillo, a little-known school teacher from a Marxist party, unexpectedly won the first round of elections. In recent days, they’ve recovered some of their losses as Castillo’s lead over former congresswoman Keiko Fujimori narrowed to within the margin of error.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Converting to an ETF would solve a lot of the Grayscale Bitcoin Trust’s problems, according to the company’s chief executive officer -- but the odds are looking longer.Shares of the $36.5 billion trust closed at a record 20.5% discount relative to its holding on Wednesday as GBTC sold off more quickly than the cryptocurrency itself, according to data compiled by Bloomberg. The disconnect is largely due to the fact that shares in the largest crypto trust can’t be redeemed, unlike most traditional exchange-traded funds -- a dynamic that can lead to dramatic supply and demand imbalances.The disconnect between GBTC prices and its Bitcoin holdings would likely be repaired by converting the trust into an ETF, Grayscale Investments CEO Michael Sonnenshein said Thursday -- a process the company is “100% committed” to doing.However, Bitcoin ETF enthusiasts were dealt several blows this past week. Securities and Exchange Commission Chairman Gary Gensler told Congress last week that the cryptocurrency market “could benefit from greater investor protection,” followed by a letter from SEC staff Tuesday warning of the risks of investing in mutual funds that hold Bitcoin futures.“It is our belief looking at the arbitrage mechanism built in ETFs that any discount or premium of where shares may trade relative to the product’s net asset value would be arb’ed away,” Sonnenshein said in a Bloomberg Television interview. “There is certainly a narrative about buying shares at a discount and potentially buying Bitcoin exposure at a discount to the spot price of Bitcoin that eventually would be arb’ed away when the product or if the product is able to convert to an ETF.”GBTC has dramatically underperformed the world’s largest cryptocurrency after the trust’s outstanding shares -- which can’t be destroyed -- ballooned by hundreds of millions over the past year. GBTC is roughly up 20% so far in 2021, while Bitcoin has surged nearly 73% over that span.The discount has deepened even as Barry Silbert’s Digital Currency Group Inc., which controls Grayscale Investments, has intervened. The company said this month that it will buy up to $750 million GBTC shares, a $500 million increase to the crypto giant’s pledge in March that it would scoop up to $250 million worth of the trust.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Prices paid to U.S. producers rose in April by more than forecast, adding to signs of a growing wave of inflationary pressure that’s extending to American consumers.The producer price index for final demand increased 0.6% from the prior month after a 1% gain in March, according to data from the Labor Department Thursday. Excluding volatile food and energy components, the so-called core PPI advanced 0.7%.A Bloomberg survey of economists called for a 0.3% monthly gain in the overall measure and a 0.4% rise in the core figure. The April advance was broad across both goods and services. The S&P 500 rose in early trading, while the yield on the 10-year Treasury note eased.As production costs continue to climb, a report Wednesday showed consumer prices are following suit, stoking the flames of an already heated debate about the path and durability of inflation that the Federal Reserve views as temporary.The PPI tracks changes in production costs, and supply bottlenecks and shortages tied to the pandemic recovery have caused commodity prices to soar. At the same time, labor costs have begun picking up. Together, the increases represent a threat to profit margins unless companies pass along the higher costs and boost productivity.Fed officials have said price pressures from pent-up demand and bottlenecks will likely prove temporary, but many others expect the pickup in inflation to prove more lasting.“There is more inflation coming,” Luca Zaramella, chief financial officer at Mondelez International Inc., said on the food and beverage maker’s April 27 earnings call. “The higher inflation will require some additional pricing and some additional productivities to offset the impact.”Consumer InflationWednesday’s data -- which showed the strongest monthly gain in the overall consumer price index since 2009 -- suggest companies are passing along at least some of the input-price inflation. The report also showed record monthly price surges in airfares and hotel stays, reflecting the impact from a broader reopening of the economy.The annual advance in the overall PPI accelerated to a 6.2% gain, a figure biased higher by the fact that it was compared to the very low reading seen in April 2020. The increase was the largest in data back to 2010.A separate Labor Department report Thursday showed applications for regular state unemployment benefits declined for a second week, to a fresh pandemic low. A slew of states have recently announced intentions to stop federal pandemic relief programs prior to their expiry in September.Producer prices excluding food, energy, and trade services -- a measure often preferred by economists because it strips out the most volatile components -- jumped 0.7% from the prior month and increased 4.6% from a year earlier.While the advance was broad-based across goods and services, about two-thirds of the monthly gain can be attributed to the 0.6% gain in prices for final demand services, the Labor Department said. The indexes for portfolio management, airline passenger services, food retailing, physician care and building materials and supply retailing all moved higher.The advance in the goods index reflected an 18.4% jump in prices received for steel mill products as well as increases in the prices for a variety of meat, residential natural gas, plastic resins and materials, and dairy products.Michael Hsu, chief executive officer at consumer-product maker Kimberly-Clark Corp., said in April that the maker of Scott toilet paper and Huggies diapers is “moving rapidly especially with selling price increases to offset commodity headwinds.”(Adds markets in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- A crack in a bridge over the Mississippi River has stranded more than 700 barges, cutting off the biggest route for U.S. agricultural exports when the critical waterway is at its busiest.The route is shut near Memphis while the Tennessee Department of Transportation inspects a large crack in a highway bridge spanning the river, according to the U.S. Coast Guard. A queue has expanded to 47 vessels and 771 barges, with 430 of those heading north and the rest going south, Petty Officer Carlos Galarza of the Coast Guard’s 8th District said Thursday afternoon by email.The Mississippi River is the main artery for U.S. crop exports, with covered barges full of grain and soy floating to terminals along the Gulf of Mexico, while crude oil as well as imported steel also travel through sections of the waterway. Any sustained outage would disrupt shipments out of the Gulf. Corn futures tumbled by the most allowed under CME Group rules partly on speculation that exports would back up.“The river is the jugular for the export market in the Midwest for both corn and beans,” said Colin Hulse, a senior risk management consultant at StoneX in Kansas City. “The length of the blockage is important. If they cannot quickly get movement, then it is a big deal. If it slows or restricts movement for a longer period it can be a big deal as well.”The stoppage along the Mississippi River is the latest calamity to upend the commodities world in recent weeks. Back in March, the Suez Canal was blocked by a giant container ship that got stuck sideways in the vital waterway for almost a week, paralyzing global shipping. And late last week, a cyberattack brought down the largest fuel pipeline in the U.S. for five days, leading to widespread gasoline shortages from Florida to Virginia.A lengthy halt on the Mississippi River could further roil crop markets, where soybeans and corn futures have hit multiyear highs amid adverse weather in Latin America and a buying spree from China. Corn futures fell Thursday by the exchange limit of 40 cents, or 5.6%, to $6.7475 a bushel in Chicago.As a workaround, traders could in theory also send some supplies on trains and divert to ports along the U.S. Pacific Northwest. Few grain and soy buyers were bidding for barges north of the river closure amid uncertainty on when vessel traffic would resume.The crack halting vehicle and waterway traffic is in the truss of the Interstate 40 Hernando DeSoto Bridge, which was found during a routine inspection, according to a Tuesday statement from the Tennessee Department of Transportation.“The timeline is still undetermined” for the waterway reopening, department spokeswoman Nichole Lawrence said Thursday morning by email.The Army Corp of Engineers could figure out a way to keep automotive traffic closed in order for water traffic to resume under the bridge, according to CRU Group analyst Josh Spoores. It may cause bottlenecks, but most consumers already used to waiting months for supplies to ship are probably fine with some added delays, he said.The New Orleans Port Region moved 47% of waterborne agricultural exports in 2017, according to the U.S. Department of Agriculture. The majority of these exports were bulk grains and bulk grain products, such as corn, soybeans, animal feed and rice. The region also supports a significant amount of edible oil exports, such as soybean and corn oils and even attracted 13% of U.S. waterborne frozen poultry exports in 2017.Some traders speculated that, based on past experience, the river might be partially opened for restricted movements while repairs are being done.“My sense is that it is not a big deal for river traffic as it will be a short-term disruption,” said Stephen Nicholson, a senior analyst for grains and oilseeds at Rabobank. “The good news is most of fertilizer has already come up river and soybean exports are at their low point. However, corn exports continue at a strong pace, so we may see a slight delay in corn barges reaching” New Orleans.It may be difficult for exporters to shift much volume to rail, as the capacity to unload trains outside of the New Orleans area is limited, according to Curt Strubhar, vice chairman and risk management consultant at Advance Trading Inc.“There aren’t many rail unloaders South of the issue,” he said, adding that New Orleans “port elevators aren’t equipped to handle a sharply higher share of rail unloads either.”Of agricultural supplies that floated on barges north of Memphis, about 84% was corn and about 13% was soybeans, according to Mike Steenhoek, executive director of the Soy Transportation Coalition, citing USDA data. Overall shipments of corn and soy during the week ended May 8 were 18% higher than a year ago.Agricultural co-operative Growmark’s St. Louis port, which sends corn and soybeans south to New Orleans for export mostly to China and receives fertilizers, will likely close Friday, according to Matt Lurkins, executive director of the firm’s grain division.“Freight was already tight,” Lurkins said in a phone interview. “Then this kind of sent us over the edge.”If the pause drags on, he said, Growmark could send more grain to processors rather than loading it on barges for export.Small volumes of crude and partly refined oil are shipped by barge on the river as well. In February, 2.85 million barrels moved from the Midwest to the Gulf Coast via barge and tanker, according to government data.Imported steel on barges will be delayed as long as traffic is halted. About 25% of imported steel travels through at least a section of the Mississippi River, according to Wood Mackenzie analyst Cicero Machado, though he said newly arriving foreign steel to ports in New Orleans or Mobile, Alabama can be diverted onto rail cars or trucks.The river also is a major artery for steel shipments within the U.S. and delays could become an issue for automakers in the South that depend on high-strength steels produced in the Midwest, he said.“At this stage the big question is: is this going to last?” Machado said. “The issue is not actually in the river, it’s in a bridge over the river -- so perhaps they’re going to find a way to manage the traffic there.”(Adds Coast Guard update in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The Tesla CEO sent the price of Bitcoin and other cryptocurrencies plummeting. But he may be aiming to turn crypto-mining green in ways that benefit Tesla.
The Walt Disney Co. blew away earnings expectations with a Thursday report, but shares still fell in late trading as the pandemic-fueled growth of its streaming services slowed down.
Now that the IRS knows what you earned last year, you may be eligible for more support.
USA TODAY answers the most asked questions regarding the Colonial Pipeline cyber attack and what states are struggling to keep gas stations stocked.